Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The gambling
commission is rewriting its rules manual using plain English
techniques. We anticipate the project will be completed by
January 1, 2008. The rules manual is being broken into
sections and rewritten a section at a time. This filing is to
provide notification that rules regarding the operation of
punch boards and pull-tabs are under review and are now being
rewritten in plain English.

We added a definition of "licensee," "licensees,"
"operator," and "operators" to the post-1/1/2008 chapter
because the terms were used in the pre-1/1/2008 rules without
being clearly defined.

We are defining these terms in the post-1/1/2008 rules to
make it clear that anyone operating the gambling activity - sometimes the licensee, sometimes a bartender or tavern worker - has to understand the gambling activity and has to obey the
operating rules. For instance, if a tavern worker knows that
a pull-tab game has an incorrect number of pull-tabs, we don't
want him or her putting it out for play. We also want all
persons operating the gambling activity to keep the required
records and follow the correct procedures.

This post-1/1/2008 definition makes it clear that those
who are operating punch boards and pull-tabs, even if they are
not licensed, must meet the requirements of this chapter.

We removed the term "device" from the post-1/1/2008 rule
so that readers would not confuse it with "gambling device"
which is defined in RCW 9.46.0241.

The statute defines "gambling device." In other
post-1/1/2008 chapters, when discussing the various pieces of
equipment which make gambling activity possible, we have used
"gambling equipment" as defined in WAC rule (pre-1/1/2008 WAC 230-02-412 and post-1/1/2008 WAC 230-03-200 Defining gambling
equipment).

The change adds consistency with the rules in other
post-1/1/2008 chapters where we have removed the word "device"
when referring to gambling equipment.

We added "chapter 9.46 RCW" to the post-1/1/2008
requirements that punch boards, pull-tabs, and pull-tab
dispensers must meet. This requirement has always been
implied, but here we are making it explicit in the
post-1/1/2008 rules.

The change adds consistency with the rules in other
post-1/1/2008 chapters where we've added compliance with
chapter 9.46 RCW as an explicit requirement.

We added a definition of "pull-tab series" to the
post-1/1/2008 chapter because the term is used in the
pre-1/1/2008 rules without being clearly defined. We wanted
to have a clear definition in the post-1/1/2008 rules.

The pre-1/1/2008 rule states that operators must ensure
that "no unauthorized person is allowed to play or sell" punch
boards or pull-tabs. We added "buys" to the post-1/1/2008
restrictions on owners because we don't want unauthorized
persons - underage persons or intoxicated players, for example - to be able to buy the punch board or pull-tabs, either.

We removed the phrase "Failing to mix pull-tabs may
result in a minimum five-day suspension of their license for
each series not mixed" from the post-1/1/2008 rule language.
We feel that the named penalty in the pre-1/1/2008 rule
restricts our ability to enforce the restriction given
different facts. For example, a five-day suspension might be
too high for an unintentional first time violation, but too
lenient for a repeated, intentional violation.

Further, the requirement to mix pull-tab series is
repeated several times in the pre-1/1/2008 rules, but we have
removed the redundancies and made one post-1/1/2008 rule about
mixing pull-tabs.

We also added an example to the section on the use of
spindle pull-tabs in the post-1/1/2008 rule. This clarifies
what a "nearby surface" means in the pre-1/1/2008 rule
language.

The rule changes eliminate a redundancy, give more
flexibility for enforcement, and clarify meaning in the
post-1/1/2008 rule.

The pre-1/1/2008 rule has a requirement about the use of
substitute flares with pull-tab series, but we separated flare
and substitute flare requirements into two rules.

Punch boards use only substitute flares because punch
boards come with an attached flare (also known as a "face
sheet"). Therefore, any flare used with a punch board would
be a substitute flare. The differences between flares and
face sheets are clear to most manufacturers and agents, but
could be confusing to new operators or manufacturers.

This change adds clarity and consistency to the
post-1/1/2008 chapter.

The operator is required to delete all references to the
prize from the flare, and from any other list, sign, or
notice. The pre-1/1/2008 rule adds, "...in such a manner that
all future customers will know the prize is no longer
available." We propose removing this phrase in the
post-1/1/2008 because we feel that "permanently and
conspicuously" deleting is more than enough to meet the
requirement.

We also recommend removing the language in the
pre-1/1/2008 about the director initiating action for a
violation of RCW 9.46.190. Since the violation would fall
under the RCW, we are removing a redundancy between the WAC
and the RCW.

The changes remove excess verbiage and redundancies in
the pre-1/1/2008 rules that don't add anything to the real
requirements.

We propose changing the pre-1/1/2008 requirement for
destruction of winning punches or pull-tabs to "permanently
defacing." This phrase covers both marking and perforating as
stated in the pre-1/1/2008 rule and makes the post-1/1/2008
rule consistent with other rules on defacing parts of the
boards or series. This change increases clarity of the
requirement in the rule.

The pre-1/1/2008 rule is ambiguous about what happens if
the winner of a seal card pull-tab cannot be located within
fourteen days to receive the prize. It states that operators
must make rules for their procedures, including how they will
select a second winner, but it doesn't say that the prize must
be awarded.

We felt that this ambiguity needed to be addressed and
clarified, so in the post-1/1/2008 rule we added that the
operator must select a second winner to receive the prize.
This change removes an ambiguity which has existed in the rule
since it was originally passed.

We removed the pre-1/1/2008 rule requirement that
operators record a winner's full name, address, and social
security number for jackpot prizes six hundred dollars or
greater for federal income tax purposes. One reason for this
change is that we no longer seek to enforce federal
requirements on operators and licensees. The other reason is
that identify [identity] theft potential rises when operators
have access to winners' social security numbers and other
personal information. By requiring them to keep it, we put
them at risk for accusations of abetting identity theft.

Our second change to the pre-1/1/2008 rule was to remove
the prohibition against winners cashing their pay out checks
on the licensed premises. In player supported jackpots (PSJs)
in the card game rules, winners are allowed to cash their pay
out checks on the licensed premises. It seems that
prohibiting punch board or pull-tab winners from doing the
same would be an inconsistency in enforcement.

We revised the pre-1/1/2008 rule to remove the so-called
"laundry list" of requirements that are already printed on the
form we require licensees to complete. This change would
match other instances in the post-1/1/2008 rules where we have
indicated that forms must be completed "in the format we
require." It adds consistency to the post-1/1/2008 rules as a
whole.

We removed the phrase "secondary element of chance" from
the post-1/1/2008 rule because it conflicts with post-1/1/2008
bingo WAC 230-10-280 about which types of games constitute a
second element of chance in a bingo game.

We included a definition of "bonus pull-tab series" to
the post-1/1/2008 rules chapter because this particular type
of pull-tab series has not been defined before. The
pre-1/1/2008 rule about bonus pull-tab series was passed in
1997 and amended in 1999, but it did not include a definition
of the series.

We made a small change to the post-1/1/2008 rule to
correct something that was overlooked when the pre-1/1/2008
rule was originally drafted in 1997.

In subsection (3) of the post-1/1/2008 rule, we changed
the "and" between the requirements for the bonus pull-tab
series to an "or" because we do not want operators of bonus
pull-tab series to allow any of the three components listed in
subsection (3) to be a part of the pull-tab series.

Using "and" implies to some readers that they only have
to avoid using a series that has all three of the components,
not each component individually.

It's unlikely that a bonus pull-tab series would have all
three components, so operators have been complying with the
requirement despite the error.

Post-1/1/2008 WAC 230-14-230 Transferring a carry-over jackpot
to another game.

We removed the reference in the pre-1/1/2008 rule to the
limit on accrued contribution amounts from series (two
thousand dollars) because the limit for accrued contribution
amounts is already in post-1/1/2008 WAC 230-14-195 "Prize
limits for carry-over jackpot pull-tab series."

The pre-1/1/2008 rule states that if "a licensee" ceases
to operate gambling activities the carry-over jackpot must be
distributed in one of four ways. We changed that pre-1/1/2008
rule language to identify the entity ceasing operations as a
"business" in the post-1/1/2008 rule rather than a licensee.
Once they've stopped operating, the entity is no longer
qualified to hold a commercial stimulant license because they
no longer have the underlying food and drink business.

We also removed the list of reasons in the pre-1/1/2008
rule for ceasing operation ("due to a sale, closure, or
failure to maintain a valid gambling license") because the
reasons have little bearing on the business' status as a
nonlicensee.

We also changed the transfer language in pre-1/1/2008
rule to refer to "the new owners who bought the business"
rather than "the licensee, which has a valid gambling
license." The new business has to undergo a separate
licensure process and we want the business ceasing operation
to understand that it simply doesn't transfer the carry-over
jackpot to the new owner unless and until that business owner
has been licensed.

If it's not closing because of a sale, the business
ceasing operation must choose one of the other methods of
distribution for the carry-over jackpot.

These changes clarify the role of the business
distributing the carry-over jackpot and to whom that entity
can distribute the jackpot.

We removed the pre-1/1/2008 rule requirement that
operators record a winner's full name, address, and social
security number for carry-over jackpot prizes six hundred
dollars or greater for federal income tax purposes. One
reason for this recommendation is that we no longer seek to
enforce federal requirements on operators and licensees.

The other reason is that identify [identity] theft
potential rises when operators have access to winners' social
security numbers and other personal information. By requiring
them to keep it, we put them at risk for accusations of
abetting identity theft.

Operators already provide jackpot winners with the
federal form to complete for tax obligations, so the tax
consequences are already explained to the players.

We removed the pre-1/1/2008 rule requirement that Class F
and above bingo licensees have to receive special approval
from the director to account for their punch board and
pull-tab prizes because licensees in Class F and above bingo
are already using the accrual method to account for bingo
prizes. It would be a simple thing for them to account for
their punch board and pull-tab prizes in a similar manner.

We also propose adding a definition of recording on a
"cash basis" to the post-1/1/2008 rule for operators who may
not be familiar with that term.

The changes make the post-1/1/2008 rule less restrictive
to licensees and clarify an accounting term.

The pre-1/1/2008 rule warns charitable and nonprofit
licensees of their responsibility under RCW 9.46.010 to
conduct gambling only for "the raising of funds for the
promotion of" their organization. Therefore, their net income
from punch boards and pull-tabs "shall not be less than zero
when measured over the annual license period."

We changed the post-1/1/2008 rule to remove the reference
to the RCW because the rule merely restates the RCW and we,
instead, provided charitable or nonprofit licensees with
formulas with which to calculate their compliance with the
requirement of RCW 9.46.010.

The post-1/1/2008 rule change provides a consistent way
to measure for the net income and cash flow requirement.

We changed a "director approval" in the pre-1/1/2008 rule
to a "staff approval" as we have done in other post-1/1/2008
rules. The pre-1/1/2008 rule required that the director
enforce penalties on commercial stimulant licensees who fail
to comply with all record-keeping requirements or who misstate
gross gambling receipts by more than 1% during any calendar
quarter. The director has reviewed this change and is
comfortable with staff taking over enforcement of this
requirement.

We have delegated many minor duties to staff in other
sections of the post-1/1/2008 rules.

We removed from the pre-1/1/2008 rule the exact number of
randomly selected punch boards or pull-tab series we may
select during a records review of gross gambling receipts.

We feel that naming the number in the WAC restricts our
ability to enforce the post-1/1/2008 rule given different
facts. For example, five boards or series might be too high
for some inspections - such as the usual inspection module
which special agents routinely perform - but the number might
be too low for other situations in records review. We may
need more than five to find a pattern of misstatements or
recording errors.

Post-1/1/2008 WAC 230-14-290 Calculating cash over and cash
short on the punch board and pull-tab monthly income summary.

We added a definition of "reconcile" to the post-1/1/2008
rule because the term is used throughout the rules and we wish
to be consistent in our meaning. This definition was also
added to post-1/1/2008 rules in chapter 230-15 WAC, Card game
rules and chapter 230-10 WAC, Bingo rules. It ensures that
licensees and operators know what we mean when we require a
reconciliation. We have had disagreements about the term in
the past and want to avoid any in the future. It adds clarity
and consistency with the post-1/1/2008 rules in all chapters.

We corrected two small errors that had crept into the
pre-1/1/2008 rule during the amendment and codification
process:

1. The licensee does not have to put database information
into the system by "scanning the stamp with a barcode reader."
The data may be input using a keyboard and special type
fonts.

2. The "interleaved two of five" barcode symbology we
require is also not called "(USS-12/5)." The pre-1/1/2008 WAC
incorrectly spells the barcode citation. In actuality, this
high-density numeric-only barcode type is "(USS-ITF-2/5)."
This barcode is used by the automatic identification and data
capture (AIDC) industry, and the symbology is approved by the
American National Standards Institute (ANSI) and the
Association for Automatic Identification and Mobility (AIM).

To further clarify which barcoding system we require to
create facsimiles of I.D. stamps, we also included in the
post-1/1/2008 rule an example of what the barcode should look
like.

Operators have been meeting the requirements using the
correct software. The corrections will help future operators.

Reasons Supporting Proposal: To make our rules manual
more user friendly. To make rules easier to find and
understand.

No small business economic impact statement has been prepared under chapter 19.85 RCW. A small business economic
impact statement has not been prepared pursuant to RCW 19.85.025, and/or the proposed rule change clarifies language
of rules without changing the effect.

A cost-benefit analysis is not required under RCW 34.05.328. The Washington state gambling commission is not an
agency that is statutorily required to prepare a cost-benefit
analysis under RCW 34.05.328.

June 4, 2007

Susan Arland

Rules Coordinator

OTS-9759.1

Chapter 230-14 WAC

PUNCH BOARD AND PULL-TAB RULES

PUNCH BOARDS AND PULL-TABSNEW SECTIONWAC 230-14-001
Defining "licensee," "licensees,"
"operator," and "operators."
(1) In this chapter, "licensee"
and "licensees" mean the business holding the punch board and
pull-tab license.

(2) "Operator" and "operators" mean licensees and those
operating the gambling activity for the licensees, for
example, those selling pull-tabs to players or putting out
games for play.

(1) A board with a number of openings of uniform size in
which the manufacturer placed, at random, slips of paper or
other substances (punches) imprinted with numbers or symbols;
and

(2) A flare (face sheet) covers the openings and sets out
the winning numbers or symbols and which prizes players may
win. The punches have specific serial numbers assigned and
printed on them; and

(3) After buying a punch, a player may select and remove
the punch from the opening of the punch board, and, if the
number on the selected punch matches the flare, the specified
prize is awarded to the player.

[]

NEW SECTIONWAC 230-14-010
Defining "pull-tab."
A "pull-tab" means:

(1) A single folded tab that conceals number(s) or
symbol(s) from view; or

(2) A banded tab that conceals number(s) or symbol(s)
from view; or

(3) A card with the face covered by perforated window(s)
or otherwise hidden to conceal number(s) or symbol(s) from
view.

(4) Some of the number(s) in each series of pull-tabs
have been selected in advance and at random as prize winners.

(5) After buying a pull-tab, a player opens the pull-tab
and, if the numbers or symbols on the pull-tab match the
flare, the player wins the prize.

[]

NEW SECTIONWAC 230-14-015
Rules apply to both punch boards and
pull-tabs.
Commission rules that apply to operators of both
punch boards and pull-tabs also apply to operators of only one
of these activities.

[]

NEW SECTIONWAC 230-14-020
Washington state identification and
inspection stamps to be called "I.D. stamps."
Because the
agents, manufacturers, and other licensees have long referred
to Washington state identification and inspection stamps as
"I.D. stamps," we will use this abbreviated name for the
stamps throughout the rules.

[]

NEW SECTIONWAC 230-14-025
Punch boards, pull-tabs, and pull-tab
dispensers must meet all requirements.
Operators must not
display or put out for play any punch board, pull-tab series,
or pull-tab dispenser that does not comply with chapter 9.46 RCW and TITLE 230 WAC.

[]

NEW SECTIONWAC 230-14-030
Determining winners or location of
winners in advance prohibited.
Manufacturers, distributors,
operators, and representatives must not possess, display,
sell, or otherwise furnish a pull-tab series when they know,
or reasonably should have known, that:

(1) The location, or approximate location, of any of the
winning pull-tabs can be determined in advance of opening by:

(a) Any pattern in the manufacture, assembly, or
packaging of the tabs; or

(b) Any markings on the tabs or container; or

(c) The use of a light; or

(2) The winning tabs have not been distributed and mixed
among all other tabs in the series.

[]

NEW SECTIONWAC 230-14-035
Defining "pull-tab series."
A "pull-tab
series" means all the pull-tabs in a group produced by a
manufacturer that offer a single set of prizes specified on
the manufacturer's accompanying flare.

[]

NEW SECTIONWAC 230-14-040
Maximum number of pull-tabs in a series.
The maximum number of pull-tabs must be no more than:

(a) Not display or operate any punch board or pull-tab
series which may have been marked, defaced, or tampered with
in any way that could affect the chances of winning; and

(b) Not change a flare, except to:

(i) Delete prizes won; or

(ii) Correct inadvertently deleted prizes; or

(iii) Add a substitute flare; and

(c) Keep all records, reports, and receipts relating to
punch boards or pull-tab series in play on the licensed
premises as long as they are in play. They must make all
records, reports, and receipts available on demand to law
enforcement officers and us; and

(d) Not place out for further play any punch board or
pull-tab series that they have permanently removed from play.

[]

NEW SECTIONWAC 230-14-055
Selling pull-tabs.
(1) No one may add
pull-tabs to a series after the manufacturer has shipped that
series.

(2) Pull-tab operators must:

(a) Thoroughly mix all pull-tabs in a series before
placing them in a dispenser or clear container and offering
them for sale. Operators may assemble pull-tabs into bundles
with a sales price of up to twenty dollars as long as they
thoroughly mix the bundles before they sell them; and

(b) Sell all pull-tabs from a dispenser we approved or a
clear container. Pull-tabs sold from a container must be
visible to players so players are able to estimate the number
of chances remaining in the series; and

(c) Put out the entire pull-tab series for play. If
using a spindle series, licensees may set the spindle on a
nearby surface, for example, on the counter; and

(d) Not put a new pull-tab series in a dispenser or a
clear container until they completely play out or permanently
remove from play the series currently in the dispenser or
container. If using a multiple-series dispenser, operators
must offer each series independently.

(3) Once put out for play, operators must not remove
pull-tabs from the dispenser or container until they are:

(a) Sold; or

(b) Permanently removed from play; or

(c) Removed by us or other law enforcement agencies
inspecting the dispenser; or

(d) Temporarily removed during necessary repair or
maintenance; or

(e) Removed to be held permanently for a player.

[]

NEW SECTIONWAC 230-14-060
Defining "flare."
A "flare" (also known
as a "face sheet" for punch boards) means an advertising
poster or card listing all the prizes, costs to play, number
of pull-tabs, and required manufacturer information for
pull-tab series.

[]

NEW SECTIONWAC 230-14-065
One flare per punch board or pull-tab
series.
Punch board and pull-tab licensees must have in
public view only one flare per punch board or pull-tab series.
Flares must have a Washington state identification stamp
number and series number on their face.

[]

NEW SECTIONWAC 230-14-070
Displaying flares.
(1) Punch board or
pull-tab operators must place flares in plain view and in the
vicinity of the pull-tab container or dispenser.

(2) If operators do not attach the flare directly to the
container or dispenser, they must include a numerical or
alphabetical reference directly on the flare and on the
container or dispenser indicating which flare corresponds to
which series.

[]

NEW SECTIONWAC 230-14-075
Substitute flares.
Manufacturers must
make all flares. Operators or distributors must not alter
flares, except that substitute flares are allowed if:

(1) The manufacturer, distributor, or operator who
changes the original flare and attaches the substitute flare
is responsible for ensuring that the substitute flare meets
all other requirements for flares; and

(2) Manufacturers, distributors, or operators must
permanently deface the original manufacturer's flare and
attach the substitute flare to the original.

(3) Distributors or operators may apply
manufacturer-produced substitute flares to punch boards and
pull-tab series; and

(4) Distributors or operators must place substitute
flares only on the upper face or the top of the punch board;
and

(5) If distributors or operators convert flares from
cash-only prizes to combined merchandise and cash prizes, they
must offer at least fifty percent of the total value of the
prizes in merchandise; and

(6) Distributors or operators may use substitute flares
on punch boards and pull-tab series which offer merchandise or
combination merchandise-cash prizes. These flares must use
numbers, not symbols, to denote winners. Distributors or
operators making substitute flares must:

(a) Select winning numbers from the manufacturer's
original flare, or from the manufacturer's designated winning
numbers on the punch board; and

(b) Assign the highest valued prize(s) to the lowest
available winning number(s); and

(c) Assign the second highest valued prize(s) to the next
lowest available winning number(s) and repeat that pattern
until they have assigned all prizes based on their value to
winning numbers. Licensed distributors may select winning
numbers consecutively from the manufacturer's original flare;
and

(7) Substitute flares must have the I.D. stamp number and
series number permanently recorded in ink on its face.

[]

NEW SECTIONWAC 230-14-080
Prize limits and percentage of winners
required.
Punch board or pull-tab operators must not possess,
display, put out for play, sell, or otherwise transfer punch
boards or pull-tab series that:

(1) Have a total payout of less than sixty percent of the
total gross gambling receipts of the board or series; or

(2) Offer boards or series, except for progressive series
or carry-over jackpots, with a single cash prize that is more
than:

(a) Five hundred dollars in cash for pull-tabs under a
dollar; or

(b) If we have approved it before, seven hundred fifty
dollars for one dollar pull-tabs; or

(3) Offer a single merchandise prize that is more than
seven hundred fifty dollars including markup; or

(4) Have a single pull-tab or punch with multiple winning
combinations that are more than the prize limit; or

(5) Offer prizes for purchasing the last pull-tab or last
punch (last sale) that are more than:

(a) One hundred dollars cash; or

(b) Merchandise that costs the licensee more than one
hundred dollars; or

(c) The highest prize offered, whichever is less; or

(6) Series that have a key to any winning numbers or
symbols.

[]

NEW SECTIONWAC 230-14-085
Calculating markup for merchandise
prizes.
To calculate sixty percent of total gross for
merchandise prizes, operators take the amount actually paid
for the prize and add to it no more than fifty percent of that
cost as markup. The total cost to the operator for the
purchase of a prize must not exceed seven hundred fifty
dollars.

(4) Not award additional punches or tabs as a prize.
Prizes, however, may involve the opportunity to advance and
win a larger prize on the same punch board or pull-tab series.
Operators must award an immediate additional opportunity to
advance called a bonus prize when offered in a bonus pull-tab
series or a step-up prize when offered on a punch board.

(a) In plain view and in the immediate vicinity of the
punch board or pull-tab series. However, operators may wrap
merchandise prizes for games that offer "surprise" prizes so
players are unable to identify the prize until opened; or

(b) Elsewhere on the premises if size or space
constraints do not allow it to be displayed in the immediate
vicinity, as long as operators note a specific reference to
the prize on the flare; or

(c) Use an accurate description or photograph of the
prize in plain view on, or immediately adjacent to, the flare
if operators cannot display the prize merchandise on the
premises; and

(3) Meet all the requirements of subsections (1) and (2)
of this section for combination cash and merchandise prizes.

[]

NEW SECTIONWAC 230-14-100
Removing prizes from flares.
(1) After
receiving a winning punch or pull-tab for more than twenty
dollars or merchandise with a retail value of more than twenty
dollars, operators must immediately permanently and
conspicuously delete all reference to the prize from the flare
and from any other list, sign, or notice. Operators then must
pay or deliver the prize to the winner.

(2) On step-up punch boards and bonus pull-tab games,
once all chances to win in a section of the flare are won,
operators must delete all references to prizes.

(3) Operators may correct an inadvertently deleted prize
by noting on the flare that such prize is still available.
When they actually award the prize, operators must permanently
and conspicuously delete the reference.

(4) If operators elect to delete prizes of less than
twenty dollars from flares, they must continue to do so until
they remove the games from play.

[]

NEW SECTIONWAC 230-14-105
Paying prizes not deleted from flares.
When a player buys out a punch board or pull-tab series,
operators must award the player all prizes not deleted from
the flare that were required to be deleted, even if the
operator failed to delete the prize from the flare when
originally won.

[]

NEW SECTIONWAC 230-14-110
Recording winners.
When punch board or
pull-tab players win more than twenty dollars or merchandise
prizes with a retail value over twenty dollars, operators must
make a record by:

(1) Having winners print their name and date of birth, in
ink, on the side of the winning punch or tab opposite the
winning symbol(s) and verifying the winner's identity and
recording the current date and initialing the winning punch or
tab; or

(2) Recording the required information on a sheet of
paper at least three inches by five inches and stapling the
winning tab or punch to the paper if the pull-tab or punch is
constructed or printed so that recording the information
required in a legible manner is not possible.

[]

NEW SECTIONWAC 230-14-115
Defacing winning punches or pull-tabs.
Within twenty-four hours after a winning punch or pull-tab
over twenty dollars is presented for payment, licensees must
permanently deface the pull-tab or punch so that it cannot be
presented again for payment.

[]

NEW SECTIONWAC 230-14-120
Permanently removing punch boards or
pull-tab series.
Operators may permanently reserve a series
for a player who leaves the premises, but intends to return
and play the game. The operator must:

(1) Prominently post house rules that are clear in
meaning and with criteria for reserving a series and the
length of time players may reserve a series; and

(2) Ensure that the player meets the criteria in the
house rules; and

(3) Contain all of the reserved series in a secure
manner, clearly identifying it as permanently reserved, and
store it in the immediate vicinity of the pull-tab area; and

(4) Not reserve a board or series for a player without
play for more than seven days and not be more than a total
reserve time of fourteen days; and

(5) Not have more than twenty-five boards or series
permanently reserved for players at one time; and

(6) Maintain adequate accounting records showing the
status of all reserved boards or series; and

(7) Not place reserved boards or series out for public
play after the reserving player finishes playing them.

[]

NEW SECTIONWAC 230-14-125
Temporarily removing punch boards or
pull-tab series from play.
Operators may temporarily remove
punch boards or pull-tab series from play and return them to
play later. Operators must clearly identify the punch board
or pull-tab series as reserved and prominently post house
rules regarding hours of play or other conditions affecting
play. Operators may temporarily remove punch boards or
pull-tab series if they are:

(1) Reserving a board or series for a player, as long as
the operator ensures that the player meets the criteria in the
house rules; or

(2) Repairing or maintaining the pull-tab dispenser or
container; or

(3) Reserving a punch board or pull-tab series for play
during certain hours of operation, for example, a "happy hour"
game; or

(2) Licensees may increase advertised prizes or add cash
or merchandise prizes to punch board or pull-tab series if
licensees:

(a) Do not change the manufacturer's flare; and

(b) Disclose to players by permanently attaching an
additional sign or notice to the manufacturer's flare:

(i) The requirements to qualify for prizes; and

(ii) The prizes offered; and

(c) Add the increased or additional prizes to every prize
within a tier or section of the flare; and

(d) Staple or otherwise permanently attach documentation
about all additional prizes to the winning punch or pull-tab.
Minimum documentation must include a description of the prize
and the name of the winner.

(3) Charitable or nonprofit licensees must only offer one
happy hour punch board or pull-tab series at any one time.

[]

NEW SECTIONWAC 230-14-135
Operating spindle, banded, or "jar" type
pull-tabs which award only merchandise prizes.
(1) Pull-tab
series which award only merchandise prizes valued at no more
than twenty dollars may use formats with predesignated
pull-tabs where:

(a) Some pull-tabs are free; or

(b) Players are reimbursed for the cost of the pull-tabs.

(2) Flares for spindle-type pull-tab series must indicate
the total number of pull-tabs and the total number of
pull-tabs designated as free or reimbursable.

(3) Free or reimbursable pull-tabs do not constitute
prizes. Operators must not include as revenue money collected
and later reimbursed when determining gross gambling receipts.

[]

SEAL CARD PULL-TAB SERIESNEW SECTIONWAC 230-14-140
Defining "seal card pull-tab series."
"Seal card pull-tab series" means a pull-tab series that
includes a predetermined number of pull-tabs which allow
players to advance to the "seal card round."

(3) "Starting jackpot prize" means the base or minimum
amount of the progressive jackpot for each series before the
operator adds any money based on the jackpot accrual rate.

(4) "Accrued jackpot prize" means the amount of all
additions to the progressive jackpot before the progressive
jackpot is won or the operator removes the series from play.

(5) "Jackpot accrual rate" means the rate at which a
progressive jackpot increases for each pull-tab sold. The
rate may be a percentage of gross gambling receipts or a
dollar value based on the price of a single pull-tab.

(6) "Instant winners" means all prizes available from a
progressive jackpot pull-tab series, except for the
progressive jackpot.

(7) "Bank system" means a network of pull-tab dispensers
offering progressive jackpot pull-tab series connected by a
computer. The computer determines the total gross gambling
receipts all the dispensers on the network receive and
calculates the amount of the progressive jackpot on the
networked dispensers.

[]

NEW SECTIONWAC 230-14-160
Progressive jackpot dispensers with a
bank system.
(1) Operators may have more than one pull-tab
dispenser for a series operating at one time.

(2) Operators may have more than one bank system
operating at one time, but one bank system must not have more
than ten pull-tab dispensers.

(a) Located in close physical proximity on the business
premises, so that players may observe all remaining pull-tabs
in a series; and

(b) Linked to a computer system which records all sales
and the accrual of the progressive jackpot.

[]

NEW SECTIONWAC 230-14-165
Additional operating requirements for
progressive jackpot pull-tab series.
Operators must conduct
progressive jackpot pull-tab series in the same way as other
pull-tab series and must follow these requirements:

(1) An owner or licensed commercial or charitable or
nonprofit gambling manager must be on the premises at all
times when progressive jackpot pull-tab series are operated;
and

(2) Only owners and licensed individuals may have access
to progressive jackpot pull-tab series and they must store the
series in secured locations; and

(3) Licensees must have sufficient funds available to pay
all prizes on redemption of winning tabs. Failure to have
sufficient funds available is prima facie evidence of
defrauding the public; and

(4) The current progressive jackpot total must be clearly
displayed near the bank of machines at all times during the
sale of progressive pull-tabs; and

(5) Operators must prominently display one flare near the
bank of machines; and

(6) Operators must not use:

(a) Substitute flares; or

(b) Merchandise prizes; or

(c) Last sale prizes; and

(7) Operators must disclose the rules for playing out a
series or carrying over accrued prizes.

[]

NEW SECTIONWAC 230-14-170
Prizes in progressive jackpot pull-tab
series.
Manufacturers and operators must offer prizes for
progressive jackpot pull-tab series that follow these
requirements:

(1) Instant winners must be at least forty percent of
total gross gambling receipts available from the series; and

(2) The starting jackpot must, at least, equal the value
of the highest instant winner; and

(3) Operators must set the minimum jackpot accrual rate
to generate an accrued jackpot prize of at least sixty percent
of the total gross gambling receipts available from the series
when added to the starting jackpot prize and instant winners;
and

(4) The manufacturer must determine the starting jackpot
prize and corresponding jackpot accrual rate needed to meet
the sixty percent payout requirement. Manufacturers must
include this information in the package with each series; and

(5) The maximum contribution to a progressive jackpot for
each individual progressive pull-tab series must be five
thousand dollars. The contribution amount excludes portions
carried over from previous series.

[]

NEW SECTIONWAC 230-14-175
Removing progressive jackpot pull-tab
series from play.
Operators must not remove a progressive
jackpot pull-tab series from play before the progressive
jackpot is won. However, operators may remove a series from
play if they:

(1) Remove the series before the beginning or at the end
of any business day; and

(2) Carry over the accrued jackpot prize from the series
and any previously carried over accrued jackpot prize to a new
series within twenty-four hours; and

(3) Add the accrued jackpot prize to the starting jackpot
amount for the new series when they place it out for play.
The amount of the jackpot must not be decreased.

[]

NEW SECTIONWAC 230-14-180
Paying out prizes and defacing tabs in
progressive jackpot pull-tab series.
Operators must pay out
progressive jackpot pull-tab prizes in the same way required
for all other pull-tabs and must follow these requirements:

(1) Operators must pay at least the starting jackpot
portion of the progressive jackpot with a check. They must
record the check number along with all the information
required in WAC 230-14-065; and

(2) Operators must immediately deface all jackpot winning
tabs when received instead of within twenty-four hours.

(2) Disclose when the event round will take place before
putting an event pull-tab series into play; and

(3) Offer event pull-tabs for sale until immediately
before the event round unless the series sells out; and

(4) Have a licensed manager present at all times an event
pull-tab series is in play, including sales of tabs and
selection of winners; and

(5) Allow floor workers to sell event pull-tabs (for
example, from aprons). Only event pull-tabs may be sold in
this way; and

(6) Maintain accounting records in the format we require
to track the event pull-tabs issued to each floor worker; and

(7) Meet all the requirements for carry-over jackpots if
the event pull-tab series offer a carry-over jackpot; and

(8) Not use substitute flares or bonus pull-tab series
with event pull-tab series.

[]

BONUS PULL-TAB SERIESNEW SECTIONWAC 230-14-200
Defining "bonus pull-tab series."
"Bonus
pull-tab series" means pull-tab series that include a
predetermined number of pull-tabs that allow players the
opportunity to advance to a bonus section to determine the
prize.

(1) In addition to all other information required for
flares, each flare clearly states:

(a) The number of chances available to advance and win a
larger prize; and

(b) The number of winning tabs at each prize level; and

(2) The series uses only guaranteed or minimum prizes in
calculating the sixty percent payout required; and

(3) The series does not use:

(a) Substitute flares; or

(b) Merchandise prizes; or

(c) Last sale prizes.

[]

NEW SECTIONWAC 230-14-210
Flares for bonus and step-up prizes.
Flares for punch boards or pull-tab series offering bonus or
step-up prizes must clearly indicate how players may win bonus
or step-up prizes, including the amount of the prizes. Bonus
or step-up prizes must not be less than the prize for the
initial winning punch or pull-tab.

(2) "Contribution amount" means the amount from each
series added to the carry-over jackpot.

[]

NEW SECTIONWAC 230-14-220
Prize limits for carry-over jackpot
pull-tab series.
Operators may use pull-tab series which
include carry-over jackpots. Operators must use the following
calculations for prizes and prize payouts for carry-over
jackpots:

(1) Guaranteed prizes must be sixty percent or more of
gross gambling receipts available from the pull-tab series.
"Guaranteed prizes" means all prizes available, excluding the
contribution amount or carry-over jackpot; and

(2) The manufacturer determines the contribution amount
and the method of play and discloses both on the flare; and

(3) The contribution amount for each series must not be
more than five hundred dollars; and

(4) An accumulated carry-over jackpot must not be more
than two thousand dollars; and

(5) If the carry-over jackpot is awarded, the sum of the
advance-level prize and the carry-over jackpot prize combined
must not be more than two thousand dollars; and

(6) If the operator carries over the jackpot to a new
series, the total of the advance-level prize and the
consolation prize must not be more than five hundred dollars.

[]

NEW SECTIONWAC 230-14-225
Sufficient funds for carry-over jackpot
pull-tab prizes.
We consider it prima facie evidence of
defrauding players if the licensee:

(1) Fails to have sufficient funds available to pay a
carry-over jackpot; or

(2) Attempts to use carry-over jackpots for any purpose
other than paying winners.

[]

NEW SECTIONWAC 230-14-230
Transferring a carry-over jackpot to
another game.
(1) If a licensee wants to remove a series from
play and the carry-over jackpot has not been won, the operator
must carry over the jackpot to a new series within one
business day.

(2) Operators must maintain a separate record creating an
audit trail for carry-over jackpots in the format we require.

[]

NEW SECTIONWAC 230-14-235
Replacing played out carry-over jackpot
series.
If no tabs remain to win the carry-over jackpot but
tabs to win other prizes still remain, operators must remove
the series from play and replace it with a new series within
seven business days.

(1) Transfer the carry-over jackpot to the new owners who
bought the business and who have a gambling license. The new
licensee must operate the carry-over jackpot game until they
award the prize; or

(2) Award the carry-over jackpot to a player by playing
out the game before closing; or

(3) Give the carry-over jackpot to the Washington state
council on problem gambling; or

(4) Give the carry-over jackpot to a charitable or
nonprofit organization we license.

[]

NEW SECTIONWAC 230-14-245
Retaining carry-over jackpot pull-tab
series.
Operators offering carry-over jackpots must keep all
pull-tab series that were used for a specific carry-over
jackpot together.

[]

NEW SECTIONWAC 230-14-250
Recording carry-over jackpots on a cash
basis.
(1) Operators must record carry-over jackpots on a
cash basis. "Cash basis" means operators do not record
carry-over jackpot contributions until the prize is awarded.

(2) However, punch board and pull-tab licensees who also
hold a Class F or above bingo license may record carry-over
jackpot contributions on their monthly records if they:

(a) Record contribution amounts, up to the jackpot
maximum, as prizes paid on the monthly records; and

(b) When the jackpot is awarded, record only amounts not
previously accrued as prizes paid; and

(c) Play no more than five carry-over jackpot series at
once; and

(d) Maintain a proper audit trail and adequate security
over the funds if the licensee does not deposit the
contributions with the net receipts.

(1) When not licensed to operate bingo, ensure that they
do not pay excessive expenses and that net income from punch
boards and pull-tabs is more than zero when measured over the
annual license period; or

(2) When licensed to operate bingo, meet the cash flow
requirements.

[]

RECORDKEEPING FOR PUNCH BOARDS AND PULL-TABSNEW SECTIONWAC 230-14-260
Inventory control.
(1) Punch board and
pull-tab operators must control and account for each punch
board and pull-tab series they obtain. Operators must:

(a) Enter the Washington state (I.D. stamp) stamp numbers
for the series in all records; and

(b) Record each pull-tab dispenser they purchase.

(2) Distributors must record every purchase of punch
boards or pull-tabs on an invoice. Operators must use this
record to account for each series between the time they
purchase it and the time they remove it from play. Invoices
must include space for the operator to attach:

(a) The I.D. stamp numbers for each board or series; and

(b) The date they placed the punch board or pull-tab
series out for play.

(3) When operators receive punch boards or pull-tab
series, they must ensure that the manufacturer or distributor
recorded all required data by comparing the Washington state
identification stamp number attached to each punch board and
pull-tab series to the number recorded on the purchase
invoice.

(4) Operators may use a separate computerized inventory
record as long as they:

(a) Use an I.D. stamp or print a computer generated
facsimile of the stamp number on the inventory record; and

(b) Record all other required information.

[]

NEW SECTIONWAC 230-14-265
Retention requirements for punch boards
and pull-tab series.
(1) Punch board and pull-tab operators
must keep all punch boards or pull-tab series removed from
play, including, at least:

(a) All prize flares; and

(b) All unplayed tabs; and

(c) All winning punches or tabs.

(2) Operators must make the items in subsection (1) of
this section available on the licensed premises for us, local
law enforcement, or local tax agencies to inspect.

(3) If stored off premises, operators must produce the
game for inspection on demand.

(4) Operators must retain punch board or pull-tab series
removed from play for:

(a) Charitable or nonprofit operators - Four months
following the last day of the month in which the board or
series was removed from play; and

(b) Commercial operators -

(i) Two months following the last day of the month in
which they removed the board or series from play; and

(ii) Three months following the day they removed the
board or series from play for winning punches or pull-tabs
over twenty dollars. Operators must also retain the flare for
these games; and

(c) Carry-over jackpot series - For four months after the
last day of the month in which the carry-over jackpot was won;
and

(d) Progressive pull-tab series - For one year. After
the retention period, operators must destroy unsold
progressive pull-tab series tabs in such a way that no one may
find and use unopened winning tabs later.

[]

NEW SECTIONWAC 230-14-270
Additional retention requirements for
some commercial stimulant licensees.
(1) Punch board and
pull-tab licensees who fail to comply with all recordkeeping
requirements or who misstate gross gambling receipts by more
than one percent during any calendar quarter will receive a
letter from us requiring them to comply with additional record
retention limits.

(2) Licensees receiving the letter must retain all punch
boards and pull-tab series for at least four months following
the last day of the month during which they were removed from
play. Specially authorized games like carry-over jackpots and
progressive pull-tab series may require longer retention
periods.

(3) After one year, licensees may petition us to remove
the increased retention requirement. The petition must
include documentation of the steps taken to correct
recordkeeping errors or misstatements.

NEW SECTIONWAC 230-14-275
Returning punch boards and pull-tab
series to the distributor or manufacturer.
(1) If punch board
and pull-tab operators return a punch board or pull-tab series
for any reason, they must write the date, the invoice or
credit memo number, and "returned" on the original purchase
invoice or inventory record.

(2) Operators must record each punch board or pull-tab
series returned on their monthly record and keep a copy of the
quality control report for the retention period required by
WAC 230-14-240.

To account for any unrecorded punch boards and pull-tab
series, licensees add the unrecorded punch board or pull-tab
series to the unadjusted gross gambling receipts. To get the
total of unrecorded punch boards or pull-tab series, licensees
multiply the total number of chances available by the price of
a single chance to determine the maximum amount that could be
generated from the punch board or pull-tab series.

*Licensees must apply this figure to the records for the month in which they purchased the punch board or pull-tab series.

(2) For recording errors -

Unadjusted gross gambling receipts

+/–

Adjustment factor

(amount of sample group divided by recorded
amount for the licensee)

Adjusted gross gambling receipts for the quarter
and the three quarters preceding**

To adjust gross gambling receipts for the results of our
records review, licensees divide the amount we determined for
a randomly selected sample of punch boards or pull-tab series
by the recorded amount for them.

**Licensees apply this figure to the total recorded gross gambling receipts for the calendar quarter from which we took
the sample and to the three quarters immediately before.

[]

NEW SECTIONWAC 230-14-285
Monthly income summary.
(1) Punch board
and pull-tab licensees must prepare a detailed monthly income
summary for punch board and pull-tab series removed from play
in the format we require either manually or electronically.

(a) Retain all original input control documents
supporting the electronic record; and

(b) Generate a monthly paper income summary that
organizes the electronic record into the format we require.

(c) Ensure that the income summary:

(i) Does not hinder our review of records; and

(ii) Is available for review no later than thirty days
following the end of the month; and

(iii) Is available within three days of a request by us,
local law enforcement, or local tax agencies.

[]

NEW SECTIONWAC 230-14-290
Calculating cash over and cash short on
the punch board and pull-tab monthly income summary.
(1) When
preparing their monthly income summary, operators must
determine cash over or cash short by:

(2) When operators sell more than one series of pull-tabs
from a single dispenser and the dispenser has meters to record
the number of tabs dispensed from each series, operators may
compute the actual cash using the meter readings. If
operators use this method, they must:

(a) Play out all series in each dispenser at least once
each calendar quarter; and

(b) Reconcile the total cash removed from the dispenser
to the total tabs sold from that dispenser to calculate the
combined cash over or cash short for all series played from
each dispenser during the period. "Reconcile" means the
operator must compare the two balances, resolve any
differences, and document the comparison and the differences
in writing.

[]

NEW SECTIONWAC 230-14-295
Electronic facsimiles of I.D. stamps.
Punch board and pull-tab licensees may use a printer
interfaced with a computer to create an electronic facsimile
of the I.D. stamps, as long as licensees:

(1) Input the I.D. stamp number into the computer; and

(2) Print records on white paper. Facsimiles of the I.D.
stamp must be at least one-quarter inch in height with a
"quiet zone" of at least one-quarter inch on each side of the
bar code; and

(3) Code "interleaved two of five" (USS-ITF-2/5) bar code
facsimiles. This is a high-density numeric-only barcode type
used in the Automatic Identification and Data Capture
industry. It is also called American National Standards
Institute/Association for Automatic Identification and
Mobility (ANSI/AIM) ITF 2/5. The bar code must have a
readability rate of at least ninety-nine percent with a
maximum of three passes with our bar code reading equipment.
An example is below:

(4) Licensees are responsible for the accuracy of
printouts and that bar codes are electronically readable.